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Tuesday, February 5, 2013

Guest Post: Exhaustion in the Context of Seeds

I have discussed the doctrine of
exhaustion in several
posts on this blog. Below is a short guest post from Ms.Apurba Kundu on the
issue of exhaustion with reference to protected seed varieties under the Plant
Variety Protection and Farmers Rights Act, 2001. Apurba has a Bachelors degree
in biotechnology engineering and a Bachelors in law from IIT Kharagpur. Apurba
loves to read and hopes to teach someday.

Now, to the Guest Post.

Exhaustion
in the Context of Seeds

The US Supreme Court will start
hearing arguments on patent exhaustion on February 19, 2013, specifically on whether the Federal Circuit Court of Appeals erred in refusing
to find patent exhaustion – a doctrine which eliminates the right to control or
prohibit the use of an invention after an authorized sale. The doctrine of
exhaustion would be analyzed by the Court in the specific context of
self-replicating technologies such as patented seeds.

A case on
similar lines was heard by the Supreme Court of Canada where it was held that the
licensor/patentee could restrict sale of seeds produced from his patented
invention and is entitled to impose contractual obligations, such as a
prohibition on saving seeds.

This led me to think about the
position of Indian Law on this issue.

The Plant Variety Protection and
Farmers Rights Act, 2001 (“PVP Act”) is a very progressive, pro-developing
country legislation. The relevant provision of the Act is Section 39(1)(iv), which
throws light on the issue of exhaustion. The provision reads thus:

a
farmer shall be deemed to be entitled to save, use, sow, resow, exchange, share
or sell his farm produce including seed of a variety protected under this Act
in the same manner as he was entitled before the coming into force of this Act:
Provided that the farmer shall not be entitled to sell branded seed of a
variety protected under this Act.

Section 2(za)(iii) of the act
defines “variety as follows”:

variety
means a plant grouping except microorganism within a single botanical taxon of
the lowest known rank, which can be considered as a unit with regard to its
suitability for being propagated, which remains unchanged after such
propagation, and includes propagating material of such variety, extant variety,
transgenic variety, farmers’ variety and essentially derived variety.

This means the traditional right
of a farmer to save seeds for the next season is protected. However, the farmer
is enjoined from selling seeds which are owned by third parties.

Also, Section 39(2) of the Act entitles
farmers to claim compensation from owners of registered seeds in case the performance
of the seed fails to match the expected performance as disclosed by the right
owner.

While discussing the PVP Act, it
is important to discuss the Seeds Bill, 2004 too which has been pending since
December 2004. New amendments were proposed by the government to the Bill in April 2010 and November 2010, which
incorporated several recommendations of the Parliamentary Standing Committee.
This bill also doesn’t restrict the farmer’s right to use or sell his
farm seeds and planting material, provided he does not sell seeds which are
owned by a third party.

Importantly, transgenic varieties of seeds can be registered only after the
applicant has obtained clearance under the Environment (Protection) Act,
1986. Farmers buying seeds are covered under Consumer Protection Act,
1986 and all registered varieties, seed producers, distributors and
vendors have to disclose the expected performance under certain given
conditions. If the seed fails to perform to expected standards, the farmer can
claim compensation from the dealer, distributor or vendor under the Consumer
Protection Act, 1986.

Maybe it’s high time that the
Seeds Bill was passed by the Parliament. Meanwhile, farmers in faraway lands must
be thinking it would have been better if they were Indian farmers.